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Eric Daniels, CEO of Lloyds TSB Group (LLOY, 300p) has decided to step up to the plate by investing almost £300,000 of his own money in Lloyds shares.
Daniels on August 1st increased his position in Lloyds TSB by about 27% by buying 100,000 shares at 296.5p, taking his holding to 473,000 shares. For a great article on Daniels and Lloyds success in dire market circumstances read this article, published in the Telegraph today (link here).
Daniels colleague, Chairman Victor Blank, has invested roughly the same amount, buying 100,000 shares at 294p, increasing his position by 50% to 300,000 shares.
Despite Daniels making £2.7m a year (source : Daily Telegraph) I consider these moves to be significant, especially if Daniels is a ‘cautious’ individual. I would like to see more puchases, from Daniels and Blank, and hopefully other board members, to reinforce this signal.
At the moment the signal strength rates as MEDIUM.
It was reported to the London Stock Exchange that the Finance Director of BT Group (BT.A, 171.3p) Hanif Lalani, had bought 58,515 shares in BT at 170.90p, investing £100,000.
Although this increases Lalanis position in BT by more than 50% (to 169,812 shares) I view this move as being of little use as a signal to investors.
1. Lalani is acting alone amongst the board members in buying BT shares. A stronger signal would be generated by other board members buying.
2. £100k is not significant in the context of Lalanis income, and probably not in terms of his net wealth either. Hanif Lalanis income including benefits but excluding any ratchet on his deferred bonus plan amounted to £1,076,000 last year (source: BT 2008 annual report).
Following first half results which were better than expected ( see Questor article of 31/7 here), Rexam (REX 376p) directors have started to buy again.
Chairman Peter Ellwood has doubled his position to 20,000 shares, investing £38k at 380p. His colleague Bill Baker, and Executive Director of Rexam, has increased his holding by 20,000 shares to 194,000 shares, by investing £76k.
In mid December 2007 Rexam issued a profit warning which sent the shares down by 20%.
Eight directors of Rexam subsequently bought shares at between 410p and 435p, increasing their holdings by an average of 70% each. The shares rallied to 480p over the next five months, outperforming the FTSE by 20%.
For me to be convinced, I need to see the board of Rexam as committed now as they were back in December. These small purchases by Ellwood and Baker do not make the grade.
I suggested in my note of July 25th that maybe the non exec purchase of £162,000 worth of shares in PureCircle (PURE, 241p) was a positive signal ahead of forthcomong Interim results in mid September.
It seems that the news came sooner than that, in the form of a major deal with Pepsico and Whole Earth for PureCircles artificial sweetener Reb-A (news announcement on PureCircle website here).
I might also suggest that the news was well known before it had been announced, as reflected by the 20% rise in PureCircle shares over the preceding 5 days.
followthedirectors... a study of directors share dealings 